Andhra HC: Merchant accounts can't be frozen over UPI payments received from fraudsters
The Andhra Pradesh High Court directed SBI to defreeze a liquor retailer's account frozen after receiving Rs 8.26 lakh in UPI payments linked to alleged fraud. The ruling limits payment-rail liability for merchants and reduces freeze risk for Indian retailers accepting UPI.
Andhra Pradesh HC ruled merchant bank accounts cannot be frozen merely for receiving UPI payments from alleged fraudsters, directing SBI to defreeze a liquor retailer's account. Ruling affects payment-rail liability and merchant risk for Indian retailers accepting UPI.
Why this matters
As UPI scales rapidly, crossing 611M biometric transactions in June 2026 and expanding cross-border into Indonesia, this ruling clarifies merchant liability, shielding retailers from freezes tied to fraudster-originated UPI inflows.
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